NEW YORK ( TheStreet) -- Telenav (Nasdaq: TNAV) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, disappointing return on equity and feeble growth in its earnings per share. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 33.8% when compared to the same quarter one year ago, falling from $12.36 million to $8.18 million.
- Net operating cash flow has significantly decreased to $3.04 million or 85.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market on the basis of return on equity, TELENAV INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- TELENAV INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TELENAV INC increased its bottom line by earning $0.94 versus $0.82 in the prior year. For the next year, the market is expecting a contraction of 29.8% in earnings ($0.66 versus $0.94).
- The gross profit margin for TELENAV INC is currently very high, coming in at 84.50%. Regardless of TNAV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNAV's net profit margin of 15.50% is significantly lower than the same period one year prior.